Unemployment, real exchange rate on impact of current and crude pertol the price: An application on Turkey

In recent years, current account deficit has become one of the most important problems in developing countries. In order to maintain macroeconomic balances, sustainable economic growth in the medium and long term, as well as economic stability, the current account deficit needs to be kept under control. The level of sophistication in terms of the current account deficit up to the problem of unemployment in countries like Turkey, which has an importance that far. When we look at the literature, there are many studies on the current account deficit and the unemployment factor among the factors determining the current account deficit has been neglected. In this study, the relationship between current account deficit and unemployment, real exchange rate and crude oil prices was examined in the period between 2003 and 2017. The study used as quarterly data for the quarter between 2017 and 2003, Turkey has benefited from the VAR methodology and technical integration and co-operation. For this purpose, stability of variables was investigated by ADF and PP tests. Then, the long-term relationship between the variables was investigated by Johansen co-integration method and it was seen that there was a co-integration relationship between the variables in the long term. VECM model was used instead of VAR model as a result of the variables moving together in the long term. As a result of the VECM analysis, the current account balance is affected in the short term when there is a change in oil prices. A change in current account balance and oil prices has an effect on unemployment. In the period we discussed, it is observed that 1 unit change in unemployment, real effective exchange rate and crude oil independent variables has 26-period effect in current balance. In other words, it is seen that the 1-unit change in the independent variables brings the balance of balance to balance at the end of 26 terms.